It's simply supply and demand - or is it?

CLAPTON

Graham_Devon wrote: »

To be fair here, he hasn't dismissed it at all.

What he is saying in the article is yes, there's a shortage of supply, BUT that shortage alone cannot explain the size of the increases in property prices.

a strange article as he discussed neither reasons for the lack of supply nor reasons for the increase in demand.

Conrad

Graham_Devon wrote: »

What he is saying in the article is yes, there's a shortage of supply, BUT that shortage alone cannot explain the size of the increases in property prices.

People price in their future gains journey. Ok they might in some sense 'overpay' now, but they are factoring in benefiting from the prosperity journey as known to them by personal example time and again.

wotsthat

Graham_Devon wrote: »

Though it's being stated that more new houses have been built than households formed.

I guess that leads us down a road of second homes etc.

Wouldn't it lead you down the road to wondering whether the stat was correct and/ or used in context?

Graham_Devon

Rinoa wrote: »

So why isn't the price of cars spiraling? Because the manufactures simply make more cars.

Hmm indeed!

Just one...well, slight issue here....

....they aint making land no more.

CLAPTON

Graham_Devon wrote: »

Hmm indeed!

Just one...well, slight issue here....

....they aint making land no more.

indeed so but we don't, in general, have a land shortage.
certainly are are 'hot spots' where land will always be expensive but overall the 'shortage' is due to planning rules.

bayzat

Completely agree, great post!

N1AK

Graham_Devon wrote: »

Hmm indeed!

Just one...well, slight issue here....

....they aint making land no more.

That's his point: The difference between the new car market and housing market is that supply isn't meaningfully constrained in the car market.

Even the bit of the article you point to as his accepting that a shortage plays a part doesn't do that. He accepts, begrudgingly, that being a small island means property costs more in general but he is expressly arguing that we aren't any shorter on houses now than 15 years ago which is nonsense. What would the point of his household forming figure be if it wasn't to imply that we don't need more houses

wotsthat

Graham_Devon wrote: »

Hmm indeed!

Just one...well, slight issue here....

....they aint making land no more.

BMW don't create new iron ore to make cars. Builders don't need to create new land.

Anyway I thought the premise of your argument was that there was broadly sufficient supply anyway - if this is the case why is the amount of land available relevant?

Graham_Devon

wotsthat wrote: »

Anyway I thought the premise of your argument was that there was broadly sufficient supply anyway - if this is the case why is the amount of land available relevant?

Seriously now, how can you possibly think that considering every 3rd post at the moment I seem to be saying "we need to build more, but it's not the only issue"?

Graham_Devon

N1AK wrote: »

That's his point: The difference between the new car market and housing market is that supply isn't meaningfully constrained in the car market.

Even the bit of the article you point to as his accepting that a shortage plays a part doesn't do that. He accepts, begrudgingly, that being a small island means property costs more in general but he is expressly arguing that we aren't any shorter on houses now than 15 years ago which is nonsense. What would the point of his household forming figure be if it wasn't to imply that we don't need more houses

I guess we'll see very soon whether it's all about supply.

Credit is now actively being restricted. The MMR...banks have capped their own mortgages in London. And soonish, interest rates will likely rise.

If it's all about supply, then house prices will not fall.

If there are credit issues at play, in that credit has recently pushed prices up further than they otherwise would have been (which is my belief), prices will fall.

The proof, as they say, will be in the pudding.